By: Kanika Gupta (2k91a43) Shweta Verma (2k91a71)

Income Tax Assignment(Deductions under Section 80)

Deduction in respect of contribution to certain pension funds(Section 80CCC)• Conditions:

i. The assessee is an individual.

ii. The assessee has in the previous year paid or deposited any amount out of his income chargeable to tax, to effect or keep in force a contract for any annuity plan of LIC of India or any other insurer for receiving pension from the fund referred to in section 10(23AAB).

iii.Where any amount standing to the credit of the assessee in a fund in respect of which a deduction has been allowed u/s 80CC(1), together with interest or bonus accrued or credited to his account, if any, is received by him or his nominee.

Contd…….iv. Where a deduction has been allowed u/s 80CCC in

respect of any amount paid or deposited, deduction with reference to such amount shall not be allowed u/s 80C.

Amount of deduction:

Amount less than Rs. 1,00,000- the whole of such amount

Amount greater than Rs. 1,00,000- Rs. 1,00,000

Deduction in respect of contribution to pension scheme of central government(Section 80CCD)

• Conditions:

i. The assessee is an individual employed by the central government or any other employer on or after 1-1-2004 or from assessment year 2009-10 and onwards, any other assessee, being an individsual.

ii.The assessee has in the previous year paid or deposited any amount in his account under a pension scheme notified or as may be notified by the central government.

Contd…iii. In the case of an assessee referred to in the condition(1), the

central government or any other employer makes any contribution to employee’s account referred to in condition(2).

Amount of DeductionIn computing the total income of an assessee the maximum limit

for such deductiona) In case of an employee, is 10% of his salary in the previous

yearb) In any other case, 10% of salary of his gross total income in

the previous year.In any case cannot be exceed Rs. 1,00,000.

Aggregate amount of deduction u/s 80C, 80CCC & 80CCD not to exceed Rs. 1,00,000(Section 80CCE)

The aggregate amount of deduction allowable under section 80C, section 80CCC and section 80CCD shall not, in any case, exceed Rs. 1,00,000.

Deduction in respect of health insurance premia(80D)

• Conditions:

i. The assessee is an individual or a HUF.

ii. The assessee has paid by any mode of payment, other than cash, in the previous year out of his income chargeable to tax.

iii.Such insurance is in accordance with a scheme framed in this behalf by----

a) the general Insurance corporation of India and approved by the central government, or

b) any other insurer and approved by the Insurance Regulatory and Development authority.

Contd… Amount of Deduction :

In the case of an individual and in the case of HUF:

a)Aggregate premia does not exceed Rs. 15,000- the whole of such sum

b)Aggregate premia exceeds Rs. 15,000- Rs. 15,000

Deduction in respect of maintenance including medical treatment of a dependent who is a person with disability(80DD)

i. The assessee is either an individual who is resident in India or a HUF who is resident in India.

ii. The assessee has, during the previous year,---

a) incurred any expenditure for the medical treatment, training and rehabilitation of a dependant, being a person with disability.

b) paid or deposited any amount under a sheme framed in this behalf by the LIC or any other insurer or the administrator or the specified company subject to the conditions specified in (3) and (4) hereafter and approved by the board in this behalf for the maintenance of a dependant, being a person with disability.

iii.The scheme referred to in condition(2)(b) above provides for payment of annuity or lump sum amount for the benefit of a dependant, being a person with disability, on the death of the individual or the member of HUF in whose name subscription to the scheme has been made.

Contd…iv. Subscriber is required to nominate either the

dependant, being a person with disability, or any other person or a trust to receive the payment on this behalf, for the benefit of the dependant, being a person with the disability

v. The assessee is required to furnish a copy of certificate issued by the medical authority in the prescribed form, along with the return of income u/s 139, in respect of the assessment year for which the deduction is claimed.

Contd… Amount of deduction:

In respect of amount of---

A)Any expenditure, referred in condition(2)(a),

B)Payment/ deposit, referred in condition(2)(b),

deduction is Rs. 50,000 during the previous year of expenditure incurred/payment or deposit of amount.

Deduction in respect of medical treatment, etc.(Section 80DDB)• Conditions:

i. The assessee is either an individual who is resident in India or a HUF who is resident in India.

ii. The assessee has, during the previous year, actually paid any amount for the medical treatment of specified disease or ailment prescribed in the rule of the Income –tax Rules.

iii. Such payment on specified disease or ailment should have been paid.

iv. The assessee is required to furnish with the return of income, a certificate in prescribed form.

Amount of Deduction:

Where the amount actually paid referred in condition (2) above:

a) Does not exceed Rs. 40,000- the whole of such amount

b) Exceeds Rs. 40,000- Rs.40,000

Deduction in respect of interest on loan taken for higher education(Section 80E)• Conditions:

i. The assessee is an individual.

ii.The assessee has paid any amount in the previous year, out of his income chargeable to tax, by way of interest on loan, taken by him from any FIs or any approved charitable institution for the purpose of pursuing his higher education or in relation to assessment year 2008-2009 and subsequent years, for the purpose of higher education of his realtive also

Contd…iii. Upto assessment year 2007-08, deduction is not

allowable to parent/guardian of the assessee but to the assessee himself.

Amount of deduction:

The deduction will be allowed @100% of the interest paid on loan taken as per condition(2) above, without any monetary ceiling limit. Such deduction is allowable from gross total income of the initial assessment year and for 7 successive assessment years or until the interest on such loan is paid by the assessee in full, whichever is earlier

Deduction in respect of donations to certain funds, charitable institutions etc.(Section 80G)

• Conditions:

i. The qualifying amount of aggregate donations under sub-items should not exceed 10% of the gross total income as reduced by deductions permissible under provisions.

ii. The monetary ceiling stated in (1) above does not apply in cases where donations are made according to certain sub-sections of 80G.

Contd….iii. The donations must be to those approved institutions

or funds established in India for a charitable purpose and fulfilling the conditions prescribed under the Income-tax Act.

iv. Donations made by an assessee to association or institution having its object the control, supervision, regulation or encouragement in India of notified games or sports will be regarded as donations made to institution established in India for a charitable purpose and will qualify for deduction u/s 80G.

Contd…v. Donations to any corporation referred to in section

10(26BB).

vi. Only donations in form of money and not in kind will qualify for deduction.

Amount of deduction:

a) Where the donations are made to: (1)the National Defence fund set up by the central govt., or (2) to the fund/institution, etc.--- 100% of qualifying donations

b) In any other case--- 50% of qualifying donations

Deduction in respect of rents paid(Section 80GG)

• Conditions:

i. The rent paid is in excess of 10% of his total income before allowing any deduction under this section.

ii. The rent paid is in respect of accommodation occupied for the purposes of his own residence subject to the condition that the assessee files declaration in form no. 10BA.

iii.the deduction is to be claimed only in cases where any residential accomodation is not owned by the assessee or by his spouse or minor child or by HUF of which he is a member.

Contd…The assessee, being an employee, who is entitled to

house rent allowance for the employer is eligible for exemption under section 10(13A) of the Act but not for deduction under section 80GG.

Amount of deduction:

25% of total income or Rs.2,000 per month, whichever is less.

Deduction in respect of contribution given by companies to political parties(Section 80GGBIn computing the total income of an assessee, being an

Indian company, there shall be deducted any sum contributed by it in the previous year:

1. To any political party; or

2. To an electoral trust also, in relation to assessment year 2010-2011 and onwards.

Deductions under sub sections of 80Deduction in respect of profits and gains from

industrial undertakings or enterprises engaged in infrastructure development, etc.(Section 80-IA)

Deduction in respect of profits and gains from industrial undertakings other than infrastructure development undertakings.(Section 80-IB).

Deduction in respect of profits and gains from industrial undertakings or enterprises engaged in development of SEZ. (Section 80-IAB)

Special provisions in respect of certain undertakings or enterprises in certain special category states(Section 80-IC)

Conditions:

i. The undertaking or enterprise has begun or begins to manufacture or produce any article or thing.

ii.The undertaking/enterprise should not be formed as a result of splitting up, or the reconstruction, of an existing business and it is not formed by the transfer to a new business of machinery or plant previously used for any purpose.

Contd…The conditions specified in section 80-IA(5) & 80-

IA(7) to (12) are applicable to eligible undertaking/enterprise u/s 80-IC.

Amount of deduction:

a) For Enterprise in state of sikkim and any of the north-eastern states, is @100%.

b) For enterprise in state of HP/Uttaranchal, is 100% for 5 assessment years.

Other deductionsDeductions in respect of profits and gains from

business of hotels and convention centers in specified areas.(Section 80-ID)

Special provisions in respect of certain undertakings in north-eastern states(Section 80-IE).

Deduction in respect of profits and gains from business of collecting and processing bio-degradable waste(Section 80JJA).

Contd…Deduction in respect of employment of new

workmen(Section 80JJAA).Deductions in respect of certain incomes of offshore

Banking units and International Financial Services Centre(Section 80LA).

Deduction in respect of income of co-operative societies(Section 80P).

Deduction in respect of royalty on patents(Section 80RRB).

Contd…Deductions in respect of contributions given by

any person to political parties (Section 80GGC).Deductions in respect of medical insurance premia

(Section 80D).

Amount of deduction: Rs. 15,000 Deductions in respect of life insurance premia,

contributions to provident fund, etc(Section 80C).

Amount of Deductions: Max. Rs. 1,00,000

Contd…Deduction in case of person with

disability(Section 80U).

Amount of deduction: 50,000Deduction in respect of certain donations for

scientific research or rural development(80 GGA).

Amount of deduction: whole amount